FEATURE: China eyeing on recycling for greener growth
Beijing has stepped up its efforts in nurturing China’s recycling industry systematically with the State Council having just released the formal regulation on the used vehicle recycling that is to take effect on June 1, according to the official release on China’s central government website www.gov.cn on May 6.
The regulation reiterates that all the used vehicle collectors and recyclers must be registered and pass the qualification checks, all the used vehicles to be scrapped must have all the related details archived correctly and completely, and no used vehicles should be illegally remodelled or resold without prior approvals and those core spare parts that can be reused should be labelled correctly, according to the document available on one.
“After years of the booming auto sales, China has more and more vehicles to have come to their lifespans, and the latest regulations, with all the detailed requirements, will welcome more recycle yards to deal with used cars,” an official from a Beijing-based auto recycling yard said.
In Beijing so far only eight licensed auto recycling yards, as such yards have to be closely regulated and will need to work closely with local traffic polices to prevent any criminal action such as dealing in stolen cars or those involved in car accidents, he added.
China is with a large pool of used vehicle resources for collection and recycling in the coming years as the country’s annual auto sales had been on a steady rise until 2018 when the country’s auto sales fell for the first year ever in 28 years, down 2.8% on year in sales to 28.1 million units.
Scrap gaining popularity in China’s steel industry
Steel recycling is gaining the popularity in China’s steel industry especially with the rising scrap utilization in steelmaking and Beijing’s greater emphasis on environmental protection, and some major Chinese steelmakers, being the steel scrap consumers, have decided to step into steel recycling to serve their and the other mills’ needs more efficiently in the future.
“We will beef up our efforts in the next few years to build the country’s top-level steel scrap processing and delivering centre,” Cai Xiangdong, general manager of Jiangsu Shagang Group Steel Scrap Company said at a recent industrial event in Zhuhai, South China’s Guangdong province.
Shagang Steel Scrap Company, a subsidiary of the Shagang Group - China’s largest electric-arc-furnace steel producer – will construct a 12-15 million tonnes/year steel scrap yard with related logistics services in the near future, he said.
For 2018, scrap utilization in China’s steelmaking rose by 13.8% on year to 202.3kg/tonne in general, while that in converters increased more substantially, climbing by 18.6% on year to 152kg/t, and the volume in EAFs grew just 0.3% on year to 662.8kg/t.
Meanwhile, Ma’anshan Steel Group, a major steel mill in East China’s Anhui province has set up three joint ventures – Masteel Chengxing Metal Resources Company, Masteel Fuyuan Metal Resources Company and Masteel Zhixin Resources Technology Company – operating a few scrap yards in East, Central and South China, Chen Zhaoqi, chairman of Ma’anshan Steel Group Steel Scrap Company, shared at the industrial event in Zhuhai.
In the next three years, Masteel will build another 10 new centres for steel scrap collection, processing and warehousing, expecting the revenue from steel scrap to reach Yuan 26 billion ($3.8 billion) in three years.
Chinese steel mills’ scrap business to hurt independent yards?
“Personally I fear that Chinese steel mills’ chasing their scrap yard dreams may affect the profit margins of scrap traders and collectors in the future and force some of the small-sized scrap trading houses out of business,” an industrial source from Guangdong commented.
A scrap market veteran with over 35 years of industrial experience, however, believes that large-sized and orderly scrap yards will better satisfy China’s steel industry in the long run.
Ji Chao, Assistant President of Baoshan Iron & Steel Company, agreed, pointing out at the Zhuhai event that a more eco-conscious steel scrap recycling process especially with steel mills’ financial and technological aid will be a sustainable development model.
Meanwhile, China’s steel scrap industry is still at its juvenile stage, with nearly 90% of the country’s steel output from blast-furnace steel mills instead of electric-arc-furnace steelmakers.
“China still has a long way to go to raise its EAF steelmaking ratio to a reasonable level, but to achieve that, a more qualified and standardized steel scrap market system is urgently needed,” Li Shubing,vice chairman from the China Association of Metalscrap Utilization, said at the Zhuhai event.
Steel scrap, therefore, is with great market potential in China, as by 2018, the country only had 252 qualified steel scrap yards with a combined processing capacity of over 70 million t/y capacity, or accounting for about one-third of the country’s total scrap output of 220 million tonnes for 2018, and the supply is expected to grow to around 300 million t/y by 2030 and 400 million t/y by 2040.
Written by Hongmei Li, li.hongmei@mysteel.com, and Rebecca Zhu, rebeccazhu@mysteel.net.cn
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